wall street. closing near the lows of the day, down 111 points on the dow, pulling back from the record high we hit yesterday, nasdaq gave up 36 points and s&p 500 down 16 1/2. observation returns tomorrow and i'll focus on earnings as we approach the reporting season next week. have a great night, everybody, i'll see you tomorrow on "closing bell." here's "fast money" right now. live from the nasdaq market site in new york city's time square, i'm melissa lee. here's what "fast" is following tonight. breakdown takedown is the recent selloff in transports signaling trouble for the bulls? chart expert explains why she's sticking with her base case. friendly phone call, why facebook's entry into the smartphone wars is unlikely to move the stock. and nuclear meltdown, dennis gartman joins us. and we've got to get to the traders and today's selloff. is this the healthy pullback or the beginning of something

bigger here? don't be fooled. take a look at the move in the s&p 500, in the mid caps, small caps, in the transports, in technology, in materials. that's where the action was. >> you're right. when are we ever talking about the dow jones industrial average? >> we don't here. we don't here. >> stop. the s&p's critical. and i don't know, i don't know the answer to your question yet. i think if you force me to give you an answer, i think it's the beginning of something much larger than the downside. but you can't answer that until another couple of days have passed by. we have the chance for some very interesting chart patterns which we will discuss later. but i think to your point about the internals, they haven't been great and i think today is potentially the beginning of something much bigger, yes. >> and not helping the selloff here, the headlines that we got about north korea, about -- the headlines have been crazy. i'm not going to repeat them, but they were pretty scary. >> can i refer to the fact in north korea, these are ridiculous headlines. yo uh throw that in, and i don't think that people were necessarily would that have

taken the market down, but you throw in the fed. the fed head saying we're starting to get tapering coming into the markets. you get the break down in gold that gets through the year-to-date lows. you get two big major commodity downgrades by credit suisse and ubs. if you look at what's breaking down, but the momentum stocks broke down. it's great we have louise on. it all seems to be under the surface. >> i think what tim's saying is important. when you think about what saved us in '08 and '09, it was global glout growth reflation. you have the shanghai comp is down, you have russia down. and you have the u.s., which is becoming the s&p in particular. a very, very crowded trade. and i think in a lot of ways it's resting on the shoulders of the federal -- of the fed. and so to me -- >> which is dangerous. >> and you have a crowded s&p trade. so to me what makes sense when we're up here at all-time highs is to be cautious. tops are a process, we're not

going to crash off of all-time highs is what i would say. you have to be cautious about committing new capital here. >> in terms of the action, where the action was. >> last time i was on with you here, mel, on the 5:00 show, we talked about whether or not the fed is going to make that move that tim very accurately called was indicated today that they might be closer to making such a move. that is so far on the outside of what's ever going to happen, folks, i can't believe it. in fact, i think it's very dangerous that this person even uttered this phrase. i don't think we're going to move at all in that regard. i think overall that for all the reasons dan cited, we're going to have to stick with the course that the fed is on right now, dan. i don't think they're going to be able to do what the san francisco fed chairman said as far as exiting in 2013 or even early 2014. >> dock, there's a lot of divergences here. home builders, they had the massive run and topped out earlier this year. and in some ways, it makes me

nervous because i think people were worried this housing bubble got reinflated. what have we seen from toll brothers and some of these home building stocks? they've closed below moving averages and technically, they look weak. to me, i think in some ways, the smart money got in early on these things and now they're starting to peel out of it. it makes me nervous. >> you're saying people are winners. anything with momentum behind it got sold. and that to me is scary. >> what was interesting, consumer staples touched a 52-week high. an all-time high, did finish by a percent. that was one area where people were willing, willing to at least stick with a little bit, compared to the rest of the markets. >> they've been -- and that's been the leading -- do you want a market that's being led by those stocks? and that's been the leadership. financials and i heard you speaking about this earlier today. financials have been selling off over the last few weeks. i'm -- it's an interesting day. and i think you need a couple more days -- >> is it a moby dick day?

>> it's a moby dick day. >> i'm sorry, trade school, please. trade school. >> you bookmarked the day. >> melville, 1840 something, long book, 635 pages-ish. >> i don't feel sorry for asking for clarification. >> bookmark it. in the meantime, let's get to company-specific or sector specific breakdowns that we're all watching. dr. jay, let's start off with you. >> sure. well, for melville, i did grab a starbucks, that is a moby dick reference there, guy. >> nice reference. >> i had the airlines, mel, which are one of the hot sectors, again, back to what everybody was saying. what were they selling today and what do they usually sell? their winners first, they don't sell the losers. this is one of the outperformers of the year, even after big couple of days selloff now since march 20th, these have been in a bit of a correction. i think that continues, but with what crude oil did today, i think you get back into these just not at this level.

i think you wait until they're downright around the 10% gain on the year, not the 22, not the 25% gains they were posting prior to this correction. >> and when you say get back into them. o the airlines. >> or specific stocks? >> airlines in particular because i think this is their major input cost and people are still traveling the constraint on the system is basically that they have capacity under control. they haven't bought into boeing's bs or airbus in buying bigger, bigger, bigger all the time. that's a positive for the airlines. >> and guy, you're looking at intel. and all the trouble start with the semiconductor industry came down. >> exactly, down 3.8% year-over-year in the february sales. december sales were lousy, january sales were lousy. now intel, if you look, the market's been -- the s&p until today has been basically in a straight line higher. intel topped out basically this time last year around $28.

it has not participated at all in the rally of the broader market. so if the tape is rolling over, you've got to believe that given what you talked about in the sia, given the fact they basically missed mobile, you've got to be concerned about the quarter they're about to report in a few weeks. >> dan? >> here's the thing. whole foods is a name to me that i actually shorted the other day. i mean, i'm worried about the u.s. consumer. like i said before, i think the u.s. is a very crowded trade here. and here's a company that disappointed just, you know, a month and a half ago and has not been able, you know, didn't confirm with the new high that the s&p made. so to me, i think this was a name you can short. technically broke down below 85, i think that's a key level. they're going to have earnings in a few weeks here. i think if you see earnings continue to decelerate, this will be re-rated, traded at 80 times this year's expected earnings. >> they've been trading the miners like they're going out of business. this isn't a revelation. and we've been dealing with this for six weeks. today was probably, might have been the cherry on the top.

if you haven't seen the selloff as deeply and really just begun, the specialty metals, these are places where you're talking about titanium, you're talking about specialty type defense and aerospace and defense where you have, i think, a lot of room to run down. these were stocks that traded and lagged the move down in metals back in 2008, '09, this is a place where you have a big shot and names that will get destroyed because, again, these are high-priced metals. ubs downgraded today, credit suisse, i'd watch these. >> i was looking at xhb, the home builder, not just because the home builders themselves, most of it trading valuations, despite the fact that their revenues are off anywhere from 40% to 60% and have a much lower backlog of orders. you have names like williams sonoma in there which really hasn't seen -- it's seen a 30% decline in eps, names like bed, bath & beyond, similar issues down from 3.60 to 2.60 a share

in eps there. take a look at the names in that etf, look like they could be at risk. potentially by p buy june 28 puts. >> what is so amazing about alerting people to these potential breakdown areas is that we have touched on most of the major sectors on the s&p 500. technology, discretionary with home foods and the home builders, transports, and we've got materials. >> yep. >> scary stuff. >> and that's why below the surface this has not been one day. this has been actually six weeks if you look at materials. it's been -- they're down 4% coming into today. >> right. let's move on here, one of our "fast money" traders sounding the alarm on the market's big run for quite some time. our own brian kelly has had his bear suit on fully zipped up for the past couple of weeks, in fact. >> thank goodness. >> let's get an update on his bear trades are playing out. bk now on the fast line.

hey, beakers, this is the day you've been waiting for. >> well, i think it's a little early to have a victory lap here, but certainly i didn't need my cooling vest under the bear suit today. it was a lot more comfortable in the bear suit today. >> what were you watching? do you think this continues? >> i thought it was going to continue for the last couple of weeks and it's been a little bit of pain on the upside. but i think, one, you've got to watch the bond market. the bond market's been telling you for weeks there's something going on. i think it's europe. that to me is the biggest catalyst out there. people way too complacent about that. and i heard a bit of the discussion you were having earlier about the fed. and i think to assume the fed has the ability to short circuit the business cycle is extremely dangerous for your financial health. >> are you ramping up your bear positions at this point? the cracks in this rally? >> yeah, i would probably add a little bit more. probably this evening, i may add more to some of the asian indices that i'm short.

i'm pretty short crude and commodities. i am still long gold, 1650's my stop. i think people start coming into that, as well. >> i was just going to ask you, gold should be benefitting from the systemic risk you're talking about in europe. italian/spanish bonds were up today. i'm curious, why you think these have to sell off in some meaningful way even if global growth like the u.s. maybe not as fast as we thought. >> well, i would say in europe, you really shouldn't be looking at the bond spreads, because what happened with cyprus, they told you you're a lot safer to be in a government bond than you are to be in a bank. i wouldn't expect european bond spreads to blow out immensely. what i would expect in europe is a significant deterioration of the economy there and that's 30% of the global economy. it's 30% of chinese exports. it's 15% of u.s. exports. so that has a major impact on corporations and so that's why i think that this selloff if today was the beginning of it has a

lot more legs. >> thank you very much, brian kelly for calling in. enjoy that bear suit while you can. >> sure, why not. >> let's hit pops and drops, big movers of the day. zynga, mike? >> yeah, they announced in the uk, zynga plus. maybe if their social media gaming technology isn't going to propel them, maybe some real gaming online might do it. however, this is a company that hasn't made any money, i'd stay away from it. >> a pop, the move 3%. guy? >> it's amazing a stock on the tape that's been straight up, it's gone straight down. on the day with the worst tape in months, this stock bounces 3%. i think sell the news, maybe another day to the upside, but these stocks have been bad, i think they continue to be bad. >> hospitals aren't where you wanted to be, mel, not when they are talking about medicare and medicaid reimbursement and so forth. that was great for humana, great

for unh, not good for tenet health care, a lot of money rotating out of that and towards the insurers. >> got a drop for pulte. >> yeah, this is one i think that as tim mentioned before, it was a good winner year-to-date. it's down at least about 10% now from those highs. looks like a double top up in the $22 level here. so this one, you know, probably has to base a little bit -- i think the home builders have to get their mojo back. i think they got ahead of themselves. >> a drop for yum brands. tim? >> yeah, a shocking breakdown for yum which had a nice run back to the pre-china food scare price move. back to the 200, doesn't matter there's crazy cheesy pizza -- >> crazy cheesy? >> that's what's coming out today. not helping the stock price. i don't think you get past the 67 level. >> some of the clothes you wear are crazy. >> thank you. >> nice comeback. that's a comeback from yesterday's dodge dart comment.

>> 24 hours. >> it was worth the wait. pop here for the mobile phone. people around the world are ringing in the 40th anniversary of a the very first call on a cell phone. the first was made by a vice president at motorola. the red letter ring was dialed up on an 1,000x that weighed 2 pounds and cost $4,000. >> this is like a scene on "wall street" when he's like, buddy boy's holding the string. buddy boy, if you could see the sunrise now. >> carry it for me. >> coming up on "fast," the growing nuclear threat from north korea. but first, we go off the charts with louise yamada to find out whether today's selloff is a warning sign for the bulls. we've got a forecast straight ahead. in today's markets, a lot can happen in a second. with fidelity's guaranteed one-second trade execution, we route your order to up to 75 market centers

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welcome back to "fast money," i'm josh lipton. carnival's triumph. making headlines again. the ship adrift for days now creating problems at port. triumph broke away in mobile,

alabama, because of high winds and now carnival confirms to cnbc that all crew members and contractors who were working aboard carnival "triumph" have been accounted for. shares closed down today 1.7 p accoun %. guy, still another blemish on carnival's safety record. and if you're a person out there looking to book a vacation, i doubt you want to go on a carnival cruise. >> you know, that's funny. funny man. i wouldn't go on a cruise at gunpoint. let's get that out of the way now. >> but if you had to, it wouldn't be carnival. >> let's talk about the stock for a second. you would think it would be in the high teens, it's not. you would think the valuation in the name like this is extended, it's not. so at $33 down 1.5%, people are going to try to play the short side and they've been getting chopped up doing it. if you think you're going to make money going short the stock, a lot of people have lost on that bet. i think it's a no touch right here. >> let's move on here.

the question we're all asking this evening is the rally running out of steam? we saw a weaker than expected, small caps seem to be breaking down. are the markets poised for a pullback? let's go off the charts with louise yamada for her take. what was your take of the action today? i'm curious. >> well, we had seen some short-term negative divergences which we had shared with clients suggesting that there could be a consolidation. now, we have to remember our definitions of consolidation is anything up to 10%. that's not exactly fast money, but it is the possibility that over time you could see that kind of a pullback. >> right. let's talk about the transports because the last time you were on, you talked about the transports and it leading the dough and that was certainly a good sign. at this point, people are wondering if there's a breakdown underway in this index. >> well, it's only come up to the 50-day moving average. a lot of stocks have broken the 50-day moving averages, and that was one of the short-term divergences in place along with

some of the momentum. i think this minor move down may suggest that consolidation is beginning. very definitely. but it doesn't relate to the dow theory which is not a short-term indicator at all. both indices have been up together so the dow theory bull market is still in place, but that's notwithstanding for pullbacks along the way. it's up 30% from when it broke out. >> right. >> and 10% would be a retracement. >> let's also talk about staples. this is an area that people have gone for defense also for yield and appreciation. a very interesting combination. what are you seeing here? >> very interesting. you've had quite an acceleration. it's one of the groups or the sectors, i should say, that has broken out through multi-year consolidations in terms of price. that one and the health care which we'll look at so from that perspective ten-year consolidation that has been broken out to new highs. we think they are in extended --

i mean they are in new structural bull markets, somewhat extended right now. >> all right. in health care, let's take a look at that as well. there we are. >> there it is. yep. >> nice breakout. >> nice breakout. what we say to traders is just keep raising your trailing stop loss. >> really, okay. well, you know what, louise, every time you come on i learn something new. you say higher the base the longer in space. and i asked him about that, he said that some of these particularly in staples and health care look vulnerable. listen to what he had to say. >> if one can stay because one is puny, one is small, but what if one is 15-days volume themselves. no, you have to start trimming, you have to start harvesting because at some point, you're not going to be able to get out when the first cracks start. >> does it matter what size the investor is? that seems to be the thrust of the argument. >> well, that's an interesting

point. and obviously particularly with the -- well, this is with staples, but an etf, for instance, it would make a difference that a lot of volume is pulled out quickly. but that doesn't change the fact that you've lifted through consolidations and now you're due for some kind of a pullback. >> okay. and let's talk about gold, louise, because this is one that's sort of a head scratcher. the markets are down and gold is down, as well. you're wondering, well, shouldn't it be up at this point? >> okay. well, this is something we really should look at carefully. because this period has been one in which the rallies have stopped at a declining moving average and each time it's come up to the moving average, which isn't pictured here, you've had feeding the ducks. you know, somebody's come in and it's called distribution, but you can think of it as feeding the ducks, putting in place lower highs along the way. we have at the moment very strong declining monthly and

weekly momentum for gold. so our risk level here is the support level that took place in may of 2012, and if we break which looks more and more as though we're about to do, you could go back to 1,400 which is about a 10% from here decline. but if you had even a worse decline, we have 1315, which takes you back to the 2005 uptrend. now, the gdx, which is the gold broken down today. and that had broken down from a two-year top, now you've broken another support level which really defines a three to four-year top. and the miners have actually underperformed the gold bouillon itself for five years. and we've been telling people we would prefer not to own the stocks if you have to own here. but now this vulnerability here.

>> yes. >> and it's very different from the 2008 consolidation. both of them are about 18, 19 months, but that one had higher lows -- >> right. >> and you had positive momentum coming in on the second half of that consolidation which we've been looking for here in the event that it could be a long saucer. but it's looking more and more vulnerable. >> let's bottom line this out there for everybody, louise, on the markets overall, you're fairly positive, but looks like consolidation -- >> yes. >> gold looks vulnerable, so watch these key levels, the may 2012 level to watch. thank you very much for stopping by. yesterday we had the socgen guy on, 1,375 for gold by year's end, louise says gold looks vulnerable, coincidentally to 1,400 if we break 1,529. are you worried? >> i'm one of the few gold bulls and obviously it's painful. yeah, you have to be worried,

the price action has been horrible. it's -- i think the movement's based solely on a stronger dollar. it makes sense, i understand it. but if what's happening in the world is what i think is happening, then gold should win at some point. understanding this could get more painful in the days ahead and that's the best i can say. >> the oversold conditions in gold are something that intraday. when you saw gold break the year-to-date closing at 1,563, this triggered a lot of stop losses. and what you get when it's oversold. this is a case where gold could really break lower now. and this is the case where you have to be very careful. i'm actually with guy. i think central banks continue to diversify. gold is not going to 1,300 any time soon. >> let's move on and talk about a big stock mover. investors streamed into netflix last quarter making it the best performing stock in the s&p. some options traders think it will finish out the week even lower. mike, what did you see today? >> yeah, it traded at about three times the 20-day moving

average in terms of volume and traded over 80,000 puts. the first time it did that since the end of january. and the most active put strike was the april 165 puts, the ones that expire at the end of this week. they paid about $2 or so for a little over 10,000 of those. those are bearish that the stock would finish below 163, obviously another several dollar decline from where it is right now by week's end. >> dan, what did you make of netflix here? and would you be a buyer at all? >> i would not be a buyer. if you look at that 180 level, sitting there for the last month, somebody was buying it hand over fist. maybe mr. icahn, rumors were he was selling. you broke the story today that he hadn't sold a share. i think you have to be careful in a name like this. and i do believe that even though volatility is high. this is the sort of name, if you think it's going to hit 200, play with call or call spreads, there is risk to this story really breaking at some point in my opinion. still to come, a look at whether jc penney's home overhaul is make or break for

the ceo ron johnson. first, the nuclear threat from north korea escalates. a look at the possible scenarios and how to protect your money. stay with us. ♪ [ cows moo ] [ sizzling ] more rain... [ thunder rumbles ] ♪ [ male announcer ] when the world moves... futures move first. learn futures from experienced pros

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north korean aggression prompting the u.s. to send missile defense to guam. hagel saying there is a real and clear danger from north korea. leader kim jong-un also recently announcing plans for restarting an inactive nuclear reactor. what is the potential impact on the markets? joining us now with the deeper dive is the founder of the world renowned gartman letter. good to see you.

>> good to be seen. >> in person, i should add. >> how much of a threat is north korea? >> they have very few capabilities. they have land, that's about it. they have land forces. if they decided to make a rush over the border, they could do that. but that's not going to happen. they have no real nuclear capabilities whatsoever. their missiles are very, very old, very immature. they can't move more than 1,500 kilometers. they've got a problem with it. i think we've blown this completely out of whack. it's fun to watch the pictures. seoul has a problem, but i think we've blown it way out of proportion. >> i think the concern maybe is that north korea may be allied with people, with countries that have the missiles or the capabilities to escalate something. >> who are they allied with? the chinese have basically written them off. they have been our satellite for a long period of time, you're embarrassing us. i guarantee are having conversations with them right now saying this has got to stop. >> i guess the question tonight

is are there dots to be connected in terms of the market selloff we saw today and the headlines in north korea? >> any time you have that kind of news, pictures of people massing on borders, any time you talk about reestablishing nuclear capabilities in the environment that we had today, it was clearly going to give a reason for markets to sell off. do i think this is a reason for sustainable selling off? there are other reasons why the stock market's going to go down, not because of north korea. >> what would you take advantage of in terms of the pullbacks here, dennis? we saw a lot of pullbacks across the board. if you think this is an overreaction, then maybe things were oversold in response. >> things might have gotten oversold for a few hours this afternoon. i think if you get any bounce because nothing does happen, i'd rather be a seller to this. i think there are problems with the stock market far beyond north korea. this was just a reason for the dow to fall down another 80 points during the day. bounces are to be sold not weakness to be bought. >> and by the way, i agree with you on north korea, those clips

looked like clips from the movies. i was on two calls where we had major, you know, houses, credit suisse and ubs say the sun has set on the super cycle. can you just quickly weigh in? with all the carnage, you're a guy known for commodities. they're trading these things like nathey're going out of business. >> i think commodities generally, timmy, have some problems. i think the grain markets have some problems. huge crops coming at us and demand is clearly going to be waning a little bit. copper, plenty of it, lots of inventory. in london, in shanghai, that's a problem. there's a lot of inventory of aluminum around, that's a problem. so i think the commodity -- i'm not sure the super cycle of the last 20 years has ended, but the cycle of the last six months of the last year, of the last two years ended, i'm afraid it has. >> appreciate it. >> thanks for having me. coming up next, extreme

makeover home edition. a look at whether jc penney can change the image by opening up boutiques. and facebook shares closing higher less than 24 hours before the android phone event. what is at stake at facebook steps back into the smartphone wars. ♪ ♪ here we are, me and you ♪ on the road ♪ and we know that it goes on and on ♪ [ female announcer ] you're the boss of your life. in charge of making memories and keeping promises. ask your financial professional how lincoln financial can help you take charge of your future. ♪ ♪ oh, oh, all the way ♪ oh, oh ♪ oh, oh, all the way ♪ ♪

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welcome back to "fast money," live in time square. we have been keeping an eye on stocks at risk of breakdowns after big runs. and guy adami has been pointing them out along the way. take a listen to what he had to say on monday. >> we've liked it for a long time. i'm concerned the price action is interesting. i won't make a big deal out of it unless it happens a couple more days. >> and that was a good call because it did happen. >> well -- >> again. >> monday specifically was an outside day. higher high than a prior day's high. and we flagged it that day. you saw what happened today in linkedin. linkedin had the huge move up a couple months ago we talked about. we could easily trade back down to 155. so be careful. psx is another one, and i have to apologize for this one because it's a name that pete and i have talked about for months now. and we didn't talk about it

yesterday. yesterday was an important day because why? you had an outside day lower in psx and look what happened today. so that's my bad and i apologize. phillips 66 right now is a no-touch until we see a washout, which we didn't see today. >> what would characterize a washout? >> three to four times normal volume. we obviously didn't see that today. we'll be on the lookout for it. but the one i'm really geared into now is the s&p. we made -- obviously an all-time high, made an all-time yearly high, a 52-week high in the s&p. earlier this week. if we closed below 1,546 or basically last monday's low, then we have an outside week, which is obviously worse than an outside day. if that happens, then you really have to be on the lookout, folks. if that happens, that could be the signal that maybe this bull run over the last four years is finally over. >> let's move on here. >> jc penney set to unveil the home goods section this friday. this as target also gets in on the game buying chef's catalog

owning brands such as kitchen aid. is home or jc penney's long awaited turn around? let's bring in the president of sw retail advisers. stacy, it's great to have you with us. >> hi, melissa. >> ron johnson has called this turn around particularly in home goods pivotal. and yet this has been the worst-performing category jc penney for the past seven years straight. is this possible? >> right. it is pivotal for ron johnson here. this has to work for him. this represents about 12% of the business, home used to represent about 20% of the business years back. so there's a huge opportunity here. and they're bringing in brands like michael grays, like jonathan adler, but martha stewart, that's a big question mark. there's an opportunity, but the question is, they've got to get the traffic back to let the people know that the home is transformed and the traffic's down 17%. >> now, the problem is they have to get the traffic back in every single category, not just home goods. and for home goods, that's where the lunch has absolutely been

eaten. if you take a look at home goods the t.j. max brand, their sales were up 18% last year. does look like they're losing share to some of these other competitors. william-sonoma came out with numbers there. >> absolutely. and if you look at the home business, it was up 8%, 10% last year. you're seeing killer numbers from all the retailers that you just mentioned. the there's no excuse here. they've got to bring in the brands. the big deal here is that martha stewart was supposed to be the headliner here. so what's going to happen with that court case? we just don't know yet. >> i agree with you, stacy. but i'd also offer, though, this is a me too situation now. none of these are exclusive brands. michael graves, target and so forth. why would this be so exciting to a shopper to bring them into jc penney when they already have these offerings at these other retailers? >> right, so some of the brands that you'll see are repetitive here. so you're basically -- what they're trying to do is take the target customer and pull them

into jc penney. the problem is, it's not the same customer. it's the coupon -- it's the older coupon person. it's not the young, hip home eclectic fan. >> i agree. >> i'm glad that stacy just powered through. >> sorry. >> you did exactly the right thing. >> stacy, good to see you in person. >> you too. coming up next on "fast," a look at what the new facebook android phone could look like ahead of tomorrow's event. and we're narrowing it down, two big industrial names battle it out. i know what you're thinking...

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headache, diarrhea, vomiting, and increase in psa. ask your doctor about the only underarm low t treatment, axiron. time now for fast money madness. we find out the final stock that will have the honor of being one of the last four standing. the tournament started out with 64 stocks from four regions over the past two weeks, we have whittled down the competition to google, disney, bank of america, and one more that will be determined right now. let's get to the final match-up in our industrial region. number nine seed transocean is up against number two seed honeywell. so let's go to the traders on this one. guy? >> i'm going to make this short

and sweet, mel. if honeywell doesn't win, there should be investigation if honeywell doesn't win. >> into us? >> yes. honeywell's the best in breed. best industrial company out there, it's been kicking rear ends for years now. h.o.n. >> just this? or all the way? >> no, i have my all the way winner. honeywell should win this one for sure. >> all right. dan? >> honeywell made all-time highs, it's a few percent off them right here. transocean, to me, this is one where it's off 20% from the highs it just made a couple of months ago. paid a 4.5% dividend yield. if i'm going one up against the other, which the game is. >> that's why we match them up and we put them against each other. >> for this round, i'm going rig, transocean. >> all right. >> yeah, at the risk of being under the scrutiny of who it's going to be, i'm going to go with the investigation, i'm going to go with dan.

honeywell has broken through the 20. i talked to aerospace and some of this sector falls under a lot of pressure here, especially if the -- the growth we're seeing in the world is starting to break down and we're seeing it in the specialty and industrial. they've gone through some of the difficult part of the news flow. this company is actually involved in very complicated deep water drilling, which is something that is going to continue to do. if you look at the price of oil and what people are saying about the oil complex, i don't think this is breaking down. we may actually have some markets ebbs and flows. rig is a company that's been underowned, tomorrow's trade and why wouldn't you rather be in that than yesterday's trade? >> yeah. >> was that a question to me? >> just saying, you know. >> thank you. >> doc? >> i think all the things tim mentioned and that dan mentioned about rig are good. >> oh. >> but -- >> but? >> but, i don't think this president's a big fan of deepwater drilling. i think that's going to be difficult. i know they do operate down in tim's turf off the coast of brazil. >> i don't think that's going to

be enough to have them outperform, so i'm going to go with honeywell. >> all right. looks like a split on this desk. it is very exciting. all right. so we tallied all your twitter votes. there could never be a tie because you out there are the fifth trader and you all picked honeywell. so the viewers speak and the winner is honeywell advancing to the last four stocks to battle it out in fast money madness. >> bright audience we have for the "fast money" crew. >> all the stocks in play and our competition, log on to fastmadness.cnbc.com, and you can get in on the game by tweeting us, tell us which stocks you're picking by using the hash tag fastmoneymadness. there'll never be any ties. >> why? >> because you are the fifth trader. and tomorrow, we'll determine the final member of the last four. >> also, known as the final four. >> can't we say final four? >> you just said it because

that's specifically for ncaa. >> i didn't say it. don't put the camera on me. i didn't say it. >> another investigation. let's move on. let's move on here. and talk about this big event we're waiting for tomorrow. it's such a juicy thing to say they're building this phone. that's why i think people wanted to write that. but it's so clearly the wrong strategy for us. let's say we built a phone, theoretically, we're not. maybe we could get 10 million people to use it, 20 million, it doesn't move the needle for us. >> now starting tomorrow facebook is getting in on the phone wars, the company's expected to unveil an htc phone with custom android software, will it make investors want to friend facebook shares? let's get a preview with a 30-year telecom industry veteran and strategic adviser. whitey, good to see you. >> hi, melissa. >> you agree that anything that

facebook does related to a phone will not move the needle? >> well, i think -- i think initially this hand set and the announcement tomorrow is not going to move the needle. i think it remains to be seen and, of course, there's some things that still are left to what gets announced tomorrow. although the rumors have been flying, but facebook has a challenge. and the challenge they have is that increasingly, facebook users are on their smartphones. they're on their smartphones 25 minutes a day on average compared to just 10 minutes a day on their desk tops, and that disparity is increasing. despite the increased use and time spent on a smartphone, their advertising revenues for smartphones are 23% of their total advertising revenue. so they have got to get users more engaged on the smartphones. they've got to push out more ads, and they have to push out more services. and i believe that's what

tomorrow is all about. >> well, it's not just getting users to use their smartphones more or stay on the app longer. they are doing that. the problem is the disconnect between the time spent on the phone and the monetization of the time spent on the phone and on the pc versus the phone. so does the app -- and i know it's all rumor at this point because the announcement hasn't come. but does the app solve any of that? >> well, first of all, caveat it and say we don't know what the app is going to be. but there's going to be a facebook home page on top of the android app and it launches when you turn on your phone so facebook is basically always on. you'll be able to post update status and you'll also probably have a news feed. it looks like they will add additional services, although, again, that we'll see tomorrow. but things like wi-fi calling,

skype calling, messaging app and so forth are all things they're going to do. but when you say is it going to move the needle, i don't think initially it will because it's an issue of reach. >> right. >> so when you look at all the smartphones out there, 160 million smartphones in the u.s., 76% of them have facebook on there. >> right. >> but half of them aren't android devices, half of them are iphones, blackberries, windows mobile is growing quickly. >> right. >> and so immediately you take that down by half and by only 76%. >> got it. >> and then the question is, how many of the people who are left are going to use that app? because some people are casual facebook users. >> sure. >> aren't on there all the time. >> thanks for your time. quickly, buyer seller? >> i agree with whitey, it's not going to move the needle at all.

still to come, the good, the bad, and the ugly. which one of our traders taking a victory lap and licking his wounds. both happening tonight. [ indistinct shouting ] ♪ [ indistinct shouting ] [ male announcer ] time and sales data. split-second stats. [ indistinct shouting ] ♪ it's so close to the options floor... [ indistinct shouting, bell dinging ] ...you'll bust your brain box. ♪ all on thinkorswim from td ameritrade. ♪

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it is time to play the good, the bad and the ugly tonight. first the good, last month dan dipped his toe into the energy space. here's what he was buying. >> it's a little stock that primarily located in texas. i know the management, it's a well-run company, it's trading, approaching 52-week lows here. i'm starting to dip my toe in the water here, bought a little exco. >> nice call. the shares up 7%. you're still in it? >> yeah, i am still in it, went up 20%, took some profits, it was my final trade two weeks ago on this show, but it's a name i want to buy back. >> all right. on to the bad now a few days after that exco call. dan took the bear side during a street fight on "fast." >> sales are only growing at single digits, low single digits for the next few years here. at some point, a stock that is

so overbought like this over the long-term i think has to -- you have to take a pause here. i don't think you should put new money to work in a stock like home depot that's performed as well as it has. >> ouch. because after that home depot shares continued to climb and they are up 10% since then, dan. what do you have to say? >> i echo everything i said a few weeks ago. i think this is overdone here and what's going on in the home builders and some of the components, this is going to come back another 5%, 10%. >> and guy wants to point out this was a good, ugly for you, but good for you because you were on the other side of the street. >> ugly/good. >> i don't know. >> he smirked. oh, look. >> what's that? >> the ugly. in a bear suit. >> dan is inside of bk's suit. >> going to go to break. got your first look tomorrow. we went out and asked people a simple question:

how old is the oldest person you've known? we gave people a sticker and had them show us. we learned a lot of us have known someone who's lived well into their 90s. and that's a great thing. but even though we're living longer, one thing that hasn't changed: the official retirement age. ♪ the question is how do you make sure you have the money you need to enjoy all of these years. ♪

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and don't get heartburn in the first place! [ male announcer ] one pill each morning. 24 hours. zero heartburn. we've got a big show tomorrow. it's the big money summit. blackrock's peter hayes and greg fisher all coming up tomorrow at "fast" at 5:00. time for the final trade. roc, i'm buying it. >> rig, r.i.g. >> da